Cisco Foundation Sparks Innovation by Investing in Promising Solutions to Climate Change
by Peter Tavernise
Submitted by Cisco Systems, Inc.
It is hard to look at the news or social media today and not be confronted with the issue of climate change. Scientific research continues to show that human-induced global warming, species extinction, and habitat loss is causing widespread disruption in nature and affecting billions of people through storms, flooding, wildfires, drought, food scarcity, and other crises.
Meanwhile, more and more people are becoming concerned about these existential threats, and looking for ways to both raise awareness and take action. According to a recent UN survey of 1.2 million people in 50 countries, 64 percent of the world’s population believes climate change is a global emergency.
It is obvious that we, as a society, must do more to reverse the effects of climate change, as well as the related impact of human activities, which are out of balance with what our ecosystems can bear. Currently, less than two percent of philanthropic dollars go toward addressing climate change. Investment capital for innovative solutions that could reduce carbon emissions that lead to global warming is inadequate as well.
For example, according to the Climate Policy Initiative, an increase of at least 590 percent in annual climate finance (about US$4.35 trillion) is required to meet internationally agreed climate objectives by 2030 and to avoid the most dangerous impacts of climate change.
As well, the Intergovernmental Panel on Climate Change says that recent mitigation investments need to increase by at least five-fold in Southeast Asia, seven-fold in Africa and 12-fold in the Middle East by 2030 to hold global warming below 2 degrees Celsius compared to pre-industrial times.
The Cisco Foundation can play a role in filling this funding gap, and in April 2021, its board of directors committed to granting and investing $100 million over ten years to do just that.
What’s behind our strategy
There are three distinctions of the Foundation’s strategy for investing in promising climate solutions:
Focus on early-stage solutions. According to the Stanford Social Innovation Review, capital flowing to early-stage climate solutions is disturbingly low, despite the critical role that these investments play in climate change mitigation. Funders may be reluctant to invest in early-stage solutions for a variety of reasons. The solutions may require long technical development timelines or costly testing, for example. But the Cisco Foundation is willing to take a risk on solutions with the potential to significantly reduce carbon in the atmosphere. Investing in early-stage climate solutions allows us to help spark innovation – by yielding valuable insights, signaling new markets, or fostering collaboration among organizations. By providing “patient capital” for ideas that have longer runways, we can help deliver significant, inclusive, and sustainable climate impact.
Diversified, blended finance approach. We recognize that different climate solutions require different types of capital across early stages of growth. As a result, our climate commitment consists of both a grants and an impact investing portfolio. This flexible and blended finance approach will help us more comprehensively fill critical climate financing gaps and catalyze impact. For example, grants to nonprofits might support community climate education and engagement, building markets, or developing proofs of concept. Impact investments into a combination of for-profit companies and climate impact funds could provide critical growth capital that scales innovation further. The Cisco Foundation has built a “venture philanthropy” grantmaking model over the last 20 years, and now for our climate portfolio we have added impact investing capital. Our emphasis on earliest stage solutions in this space is one of our key differentiators.
Respect for natural systems and an emphasis on regeneration. We live in naturally connected systems where climate is intrinsically linked to communities. To reverse the impacts of climate change and build an inclusive future for all, we need holistic solutions that acknowledge the complex relationship between humanity and nature. We must rebuild connectivity between these systems and integrate social equity and economic opportunity into climate solutions. We also want to consider centuries of Tribal and Indigenous knowledge alongside science and cutting-edge technology to co-create solutions that anticipate, prepare for, and respond to climate-related events, as well as seek to support dynamic balance. You will see a great example of this above in Nia Tero.
What we are funding
It is hard to understate the demand for the kind of early-stage funding we are providing. Within 20 minutes of announcing our $100 million commitment in April 2021, we had a LinkedIn connection request from an interested party. Since then, we have held hundreds of meetings with organizations led by amazing people who are devoting all of their attention to the climate crisis, and coming up with truly impressive regenerative solutions.
As our team dives into extensive due diligence around these grants and investments, we strive to invest in climate solutions along the entire “innovation continuum,” from conceptual ideas to solutions that are ready for commercial deployment and widespread impact.
We have already funded a number of solutions that I am excited about, including:
Nia Tero is a nonprofit grantee that exists to ensure that Indigenous peoples have the economic power and cultural independence to steward and protect their livelihoods and the territories they call home. We partnered to fund Kara Solar, a community enterprise initiative that trains Indigenous community members as technicians who build, operate and maintain solar electric shuttle boats in rainforest communities. These boats reduce deforestation by removing the need for roads to be created, linking numerous communities across various Indigenous territories, all while creating economic opportunity for the community members. Its current phase of deployment encompasses 70 villages. In the first six months of our grant partnership, Kara Solar trained 13 Achuar technicians in the Ecuadorian Amazon and 13 Tumucumaque technicians in the Brazilian Amazon. Finally, Cisco’s support enables Nia Tero, Conservation Strategy Fund, and Kara Solar to conduct an analysis on the impact of electric river transportation on the incursion of new roads and deforestation.
Project Vesta is a hybrid nonprofit/public–benefit enterprise whose solution is to capture carbon from the atmosphere and support coastal resilience by using the mineral olivine. The carbon-capture properties and safety of olivine have been proven in lab settings.Our grant is enabling Project Vesta to test it in real-world circumstances – by spreading it on beaches to further assess olivine’s effects on wildlife and ecosystems and the rate at which it sequesters carbon. Factors like strength of wave action, temperature of the water and sand, and how the mineral dissolves will all affect the rate at which olivine absorbs carbon. Our support is intended to help Project Vesta find the best conditions for optimal sequestration and advance the technology, which will help them create a new carbon credit opportunity for $35/tonne of carbon removed at full scale. Learn more about Project Vesta’s work in this short clip,which was recently featured in the documentary Solving for Zero.
Vibrant Planet & VP Data Commons is a for–profit/nonprofit hybrid organization addressing the growing problem of wildfires and sustainable land management. Cisco Foundation has initially supported the nonprofit effort of the Data Commons. In 2020, fires in California released 110 million tonnes of carbon – that is 40% more than the state’s entire annual emissions. Fires also destroy trees, which are vital to removing carbon from the atmosphere. Vibrant Planet has developed a data-driven tech platform that supports better decision making on issues like forest restoration, wildfire risk mitigation, land use planning, insurance, and utility solutions. Using satellite data and a remote sensing method called light detection and ranging (LIDAR), they are building system maps that will allow planning data to be available to decisionmakers in minutes, not years. For example, their first licensed app, Land Tender, is designed to help speed ecological forest restoration and wildfire risk mitigation to communities. Their platform can be used by power companies, insurance companies, landowners, and governments to better manage resources, make critical land management decisions, and prevent wildfires.
Azolla Ventures. We have invested $5 million in the second fund created by Prime Coalition, which will build a portfolio of 20 to 25 otherwise neglected climate startups from across the spectrum of industries, each with the potential for gigaton-scale greenhouse gas emission reduction. In addition to meeting the threshold for high–impact potential, all companies in Azolla’s portfolio must also be a fit for Prime’s test of additionality, meaning they would not be able to scale their solution and achieve their climate impact goals were it not for Azolla’s support. Azolla is focused on ventures that tend to have long time horizons, are capital intensive, and carry outsized risk in the eyes of returns-first investors but are a critical component of those needed to bring the planet back into balance. Azolla Ventures is a $200 million fund that uses both charitable capital and traditional investments in a structure that allows it to catalyze transformative climate ventures at the early stage and keep them on track for impact through exit.
As we finalize more funding and start to see the results of our impact, we will share more on this blog. Please subscribe to stay informed of the innovations that could help society persevere against climate change and build the climate future we all want.